Character Merchandising - US - December 2013
“As the economy is not in its full swing of recovery since the last recession, patronage at mass merchandisers for character-branded purchases become a compelling option in exchange of value. Retailers are becoming more restrictive with the properties they give shelf space for, causing manufacturers to lean toward a few major properties to ensure return.”
– Ika Erwina, Retail and Technology Analyst
This report looks at the following areas:
- Maximizing the effectiveness of character merchandising for kids
- Is there a room in the market for premium character merchandise products?
- What are the core messages when using character merchandising
Character-based merchandise is a sub-set of the larger licensed merchandise market, and while the overall market has been treading water, sales of character-based goods fell almost 4% over the period. Toys and games dominate the character-based merchandise market, accounting for just under a third of all sales, with no other sector generating more than 10%. Despite what would appear to be a dynamic market, sales of video games/software fell significantly over the same period, however this is likely impacted by consumer waiting on the launch of new consoles in 2013/14.
The dominance of mass merchandisers in this market is likely a contributing fact to lower sales value growth as price has become a major consumer focus even in this post-recession environment.
For the purpose of this report, character merchandising is defined as the use of popular (typically fictional) characters from the world of entertainment to promote the sale of consumer goods, including those lines of merchandise that have been especially created to bear the name and image of the character. Characters typically derive from a number of different media, the most popular being the following:
- television series
- film cartoons
- cartoon feature films
- live action feature films
- toy creations
- comic books
- fiction books
- newspaper strip cartoons
- computer games
It should be noted that, given the well-established spin-off trend, characters overlap these media due to the importance of cross-media activity (eg, Harry Potter in books, live-action films, PlayStation 2 computer games, and theme-park manifestations).Character merchandising is part of a broader industry that seeks to promote the sale of consumer goods via the licensing of copyrighted intellectual properties and other means such as product brands (eg, Cosmopolitan bed linen and lingerie), sports organizations (eg, Chicago Bulls basketball or the National Football League), and adult characters (eg, the Playboy Bunny).
In a rapidly evolving marketplace, character merchandising takes on a number of different formats. For the purposes of this report, they have been segmented as follows:
- License merchandising: Confers the right to reproduce a character (eg, a popular cartoon figure), a vignette or logo on specific manufactured goods. Examples include a jigsaw puzzle featuring a cartoon character or pajamas featuring a character, such as Winnie the Pooh.
License merchandising generally adds value in that the character enhances the product in such a manner as to make it the overriding reason for the consumer to purchase the product.
- Promotional merchandising: When a character is linked to a product for a specific period of time in order to boost sales or help establish a new product. The product remains the same but is accorded additional attention value by including a depiction of a character on or in the packaging, such as a free sticker or model inside the pack.
Character merchandising is not exclusively aimed at children, and while children are generally the key target audience, adults tend to be the principal purchasers. Children are key consumers of character-led products, especially the under-10s, since older children tend to eschew such gimmicks as they aspire to become young adults.
Examples of merchandised goods embracing media-led items include but are not limited to:
- media-led merchandise of any kind such as books, book sets, magazines, films, videos, DVDs, computer games
- greetings cards and other stationery
- character-led toys and board and other games including soft toys and action figures or dolls
- character-led bicycles, scooters, tricycles such as the Barbie 12” girls’ cycle, skateboards, switchboards (scooter-cum-skateboard), cycle helmets, and accessories
- character timepieces, including both alarm and “talking” clocks and watches such as a Harry Potter watch, adult collectibles such as figurines and limited-edition pieces
- oral hygiene items: toothbrushes and toothpaste
- adult and children’s/infants’ clothing and accessories including novelty socks, ties, boxer shorts
- bags, pencil cases, and sporting goods
- home furnishings and housewares including inflatable chairs, themed tableware, cutlery, and giftware, bed linens and other textiles such as nursery linens, lampshades, wallpaper, and wallpaper borders
- mobile phone accessories such as covers
- food and drink character items of any kind such as fast food, cake mixes, cakes, cookies, yogurts, and soft drinks
Specifically excluded from the definition is expenditure on entrance fees for visitor attractions such as the Wizarding World of Harry Potter at Universal Orlando, Florida, and Disney World. Also specifically excluded from the definition is the practice of celebrities who allow their names to be associated with specific products – for example, Michael Jordan and Nike – as this is defined as celebrity endorsement.
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